Position of the Law on an Agreement for the Sale of a Bank Debt

CASE TITLE:  YAMADAH CO. LTD. & ORS V. UNITY BANK PLC & ANOR (2023) LPELR-61222(CA)

JUDGMENT DATE: 18TH JULY, 2023

PRACTICE AREA: COMMERCIAL LAW

LEAD JUDGMENT: UCHECHUKWU ONYEMENAM, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on Recovery of Debt.

FACTS:

In a case before the Federal High Court, Kano Judicial Division, the Respondents filed a lawsuit against the Appellants, seeking the recovery of N518,641,317.87. The claim was based on money allegedly received by the 1st Defendant through multiple facilities, guaranteed by the 2nd and 3rd Defendants from the 1st Plaintiff Bank. The Appellants objected to the jurisdiction of the trial court, arguing that the subject matter was not within its jurisdiction.

The Appellants, a corporate entity, and two individuals who guaranteed the loan facilities, asserted that the 1st Appellant approached the 1st Respondent for a loan, and after multiple loan facilities were granted, the 1st Appellant experienced issues with overcharging and unwarranted charges on her account, which the 1st Respondent did not address. The Respondents countered, alleging that all facilities were fully utilized by the 1st Appellant, who abandoned her loan account, resulting in a debt of N518,641,317.87.

The trial Court at the end of the hearing, dismissed the preliminary objection, assumed jurisdiction, entered judgment in part to the tune of N179,000,000.00 (One Hundred Seventy-Nine Naira only) and transferred the balance to the general cause list for determination.

This appeal is a result of the said judgment.

ISSUES FOR DETERMINATION:

The appeal was determined on the following issues:

1. “Whether the trial Court was right when it held that it had the jurisdictional competence to entertain the subject matter of the suit before it.

2. Whether the lower trial Court was right when it held that the Appellants have admitted being indebted to the Respondents in the sum of N179,000,000.00 (One Hundred and Seventy-Nine Million Naira only).

3. Whether the learned trial Judge was right when he failed to consider the repayment of the loan through deposit in the sum of N61,889,500.00 made by the Appellants through their loan account to the Respondents.”

DECISION/HELD:

The appeal was dismissed.

RATIOS:

  • PRACTICE AND PROCEDURE – UNDEFENDED LIST PROCEDURE – Whether a judgment obtained under the undefended list is a judgment on the merit
  • JUDGMENT AND ORDER – JUDGMENT OF COURT – Effect of judgment on cases determined on their merit
  • PRACTICE AND PROCEDURE – LEAVE TO DEFEND – When the Court will not grant leave to defend
  • APPEAL – APPEAL AS OF RIGHT – Whether the final judgment of the High Court sitting at first instance is appealable as of right
  • APPEAL – FRESH POINT(S) ON APPEAL – Whether leave of court is required to raise fresh issue on appeal
  • JURISDICTION – JURISDICTION OF THE FEDERAL HIGH COURT – Whether the Federal High Court has jurisdiction over recovery of debt/interest from a banker/customer relationship
  • PRACTICE AND PROCEDURE – UNDEFENDED LIST PROCEDURE – Principles/Rules governing the undefended list procedure
  • ACTION – CONSISTENCY IN PRESENTATION OF A CASE – Whether a party is permitted to approbate and reprobate at the same time
  • JURISDICTION – JURISDICTION OF THE STATE/FEDERAL HIGH COURT – Whether the Federal High Court and the State High Courts have concurrent jurisdictions in respect of banker/customer relationships
  • COMMERCIAL LAW – DEBT – Position of the law on agreement for sale of bank debt of a customer
  • COURT – JURISDICTION – Principles of law with respect to the question/issue of jurisdiction

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